Suppose you invest 40% of your fund in stock A and the other 60% in stock B. If stock A and B are expected to have the following returns next year, then what are the expected returns for Stock A, Stock B and your portfolio? ProbabilityStock A Stock B State of Economy Recession Boom .3 .7 13.9%; 4.8%; 10.26% 10.2%; 4.8%; 10.26% 13.9%; 4.8%; 8.44% 10.2%; 4.4%; 8.44% -12% 2% 25% 6%

Suppose you invest 40% of your fund in stock A and the other 60% in stock B. If stock A and B are expected to have the following returns next year, then what are the expected returns for Stock A, Stock B and your portfolio? ProbabilityStock A Stock B State of Economy Recession Boom .3 .7 13.9%; 4.8%; 10.26% 10.2%; 4.8%; 10.26% 13.9%; 4.8%; 8.44% 10.2%; 4.4%; 8.44% -12% 2% 25% 6%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 25P

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